New office supply in 17 cities monitored by CBRE is forecasted to increase by 30% y-o-y to 10 million sq. m. in 2019. Slower economic growth and ample new supply will ensure the average vacancy rate monitored by CBRE exceeds 20%. Office rents are expected to stay under pressure.
Slower economic growth and ample new supply will ensure the average vacancy rate in the 17 cities monitored by CBRE exceeds 20% in 2019. Ground floor rents of shopping malls are expect to record steady growth of between 0%-3% in 2019, except for the rental decline in Qingdao and Chongqing.
Undersupply in major cities has lowered the vacancy rates in 2018, while the rents in the three major urban clusters have all increased, providing a solid foundation for the market in 2019.
Purchasing activity was led by foreign-funded institutions, a trend expected to gain further momentum. The improving monetary environment, rising availability of investable assets and increasing fundraising will drive the investment market in 2019. Investment in tier II cities continues to be more selective.